Social network reach agreement with VR headset maker for $400 million in cash, 23.1 million shares of stock [UPDATE: comment from Palmer Luckey]

Facebook has just placed a massive bet on virtual reality, as the social network today announced a deal to acquire Oculus VR, makers of the upcoming Rift headset, for approximately $2 billion in cash and stock, with another $300 million contingent on performance.

Under the terms of the deal, Facebook will pay $400 million of the acquisition cost in cash, with the remainder made up by 23.1 million shares of Facebook stock (which closed today's trading at $64.10).

"Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow," Facebook founder and CEO Mark Zuckerberg said in announcing the deal. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."

In a post on his timeline, Zuckerberg said that immersive gaming is only the first application the company has in mind for Oculus' technology. He expects that one day, augmented reality will be a fact of life for billions of people.

"After games, we're going to make Oculus a platform for many other experiences," Zuckerberg said. "Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles in your home.

"This is really a new communication platform," he continued. "By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures."

The Oculus management team released its own statement, saying, "At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform. But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step."

They went on to say that Facebook shared their belief in VR's potential to change the world, and that the social networking giant will help make that happen.

"This partnership is one of the most important moments for virtual reality: it gives us the best shot at truly changing the world," they said. "It opens doors to new opportunities and partnerships, reduces risk on the manufacturing and work capital side, allows us to publish more made-for-VR content, and lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR."

Oculus will remain in Irvine, California and continue development on the Rift. The company has already received orders for more than 75,000 dev kits of the forthcoming VR headset.

The acquisition is expected to close in the second quarter of the year. As for the Oculus Rift, it still has not been given a launch window.

[UPDATE] In a post on Reddit, Oculus founder Palmer Luckey shared his thoughts on what the Facebook acquisition means for his company and VR going forward:

"I've always loved games. They're windows into worlds that let us travel somewhere fantastic. My foray into virtual reality was driven by a desire to enhance my gaming experience; to make my rig more than just a window to these worlds, to actually let me step inside them. As time went on, I realized that VR technology wasn't just possible, it was almost ready to move into the mainstream. All it needed was the right push."

"We started Oculus VR with the vision of making virtual reality affordable and accessible, to allow everyone to experience the impossible. With the help of an incredible community, we've received orders for over 75,000 development kits from game developers, content creators, and artists around the world. When Facebook first approached us about partnering, I was skeptical. As I learned more about the company and its vision and spoke with Mark, the partnership not only made sense, but became the clear and obvious path to delivering virtual reality to everyone. Facebook was founded with the vision of making the world a more connected place. Virtual reality is a medium that allows us to share experiences with others in ways that were never before possible."

"Facebook is run in an open way that's aligned with Oculus' culture. Over the last decade, Mark and Facebook have been champions of open software and hardware, pushing the envelope of innovation for the entire tech industry. As Facebook has grown, they've continued to invest in efforts like with the Open Compute Project, their initiative that aims to drive innovation and reduce the cost of computing infrastructure across the industry. This is a team that's used to making bold bets on the future."

"In the end, I kept coming back to a question we always ask ourselves every day at Oculus: what's best for the future of virtual reality? Partnering with Mark and the Facebook team is a unique and powerful opportunity. The partnership accelerates our vision, allows us to execute on some of our most creative ideas and take risks that were otherwise impossible. Most importantly, it means a better Oculus Rift with fewer compromises even faster than we anticipated."

"Very little changes day-to-day at Oculus, although we'll have substantially more resources to build the right team. If you want to come work on these hard problems in computer vision, graphics, input, and audio, please apply!"

"This is a special moment for the gaming industry - Oculus' somewhat unpredictable future just became crystal clear: virtual reality is coming, and it's going to change the way we play games forever. I'm obsessed with VR. I spend every day pushing further, and every night dreaming of where we are going. Even in my wildest dreams, I never imagined we'd come so far so fast. I'm proud to be a member of this community - thank you all for carrying virtual reality and gaming forward and trusting in us to deliver. We won't let you down."

[UPDATE 2] On a Facebook investor's conference call held shortly after the news broke, Mark Zuckerberg and Oculus CEO Brendan Iribe addressed the implications of the deal and fielded a few questions. Here are some of the more notable comments from the call.

Mark Zuckerberg:

“There are now more than one billion people using our mobile apps alone... and more than half of our ad revenue comes from mobile. We still have a lot of work to do on mobile but at this point we feel strong enough in our position that strategically we also want to start focusing on building the next major computing platform that will come after mobile. The history of our industry is that every 10 or 15 years there's a new major computing platform whether it's the PC, the web or now mobile. History suggests that there will be more platforms to come and that whoever builds and defines these will not only shape all the experiences that our industry builds but also benefit financially and strategically.”

“We're going to focus on helping Oculus build out their product and develop partnerships to support more games and accelerate their plans, and they'll continue operating independently within Facebook to do this... Oculus has the potential to be the most social platform ever. We're making a long-term bet that immersive virtual and augmented reality will become a part of people's daily lives.”

“The Oculus product that they have now is way ahead of anything else out there. Sony has demoed something very early. Microsoft hasn't even gotten to the point where they have anything to demo yet... The other thing that I think is important here is in order to build a really big computing platform there are a bunch of important use cases that you need to support. So whether you're looking at mobile and how people spend their time or PCs before... what we see is that 40 percent of the time people spend overall is in gaming, and 40 percent is also spent in social communications and about half of that is on Facebook, which is nice. What we basically believe is that unlike the Microsoft or Sony pure console strategies if you want to make this a real computing platform you need to fuse both of those things together...That I think was the opportunity we saw in working together, how this transcends the traditional console opportunity to really make it more of a ubiquitous computing platform. I think these two companies are really the only ones set up to have that happen."

Brendan Iribe:

“In 2012 we started Oculus with the vision of making incredible, affordable and ubiquitous VR available to the world. VR sounds like something out of science fiction, but science fiction has a habit of becoming fact and we believe that VR will connect people in ways that we never before thought. VR opens up entirely new opportunities... It will fundamentally change the way we live, play, share, and communicate. We started with a focus on next-generation gaming. Now we're teaming up with Facebook to invent the future.”

“Facebook brings greater scale with unique resources and capabilities that accelerate VR's future. By opening doors to new partnerships, helping develop the core functionality of our product and supporting us with recruiting, marketing and infrastructure, the Oculus team can focus on doing what we do best - solving hard problems and delivering on the dream of VR... Today's announcement is about bringing even greater energy and resources to our work.”

“Something that we didn't expect in the beginning that became really obvious was how big the potential was for the social experience. When you truly feel in VR like you're actually present in another space and you look around and your brain is just completely convinced... something fundamentally changes and you start to realize how big this can be. In that same sense of presence, if you can see somebody else and you can actually look at them and your brain believes that they are right in front of you... you get goosebumps..."

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I was shocked the moment it broke. The bank of Facebook really is in full force right now, this plus WhatsApp makes $21 Billion worth of acquisitions alone. This will have huge potential benefits for Oculus with the sheer financial and marketing power behind it now.

Perhaps an even crazier thought is what Facebook will do next. VR has been by far one of the biggest talking points in gaming during the Spring/GDC season. They could acquire just about anything as could their powerful rivals who will look at these moves.

hmm, I am torn on this. It could go very well, or very badly. I think the mass games market don't like the idea of FB turning this epic piece of new tech into something super commercial, but it was always going to happen with VR anyway right? Better sooner than later? Also as far as financial backing goes they are practically limitless now so we could see development be pushed forward faster.

Let's just hope that every time we put on an Oculus headset the FB logo is not ever present in the corner....that and they don't change it so it's blue ¬_¬

This just does not make any sense. There were so many better choices for Occulus to be acquired by. Did they decide it is time to cash in and Facebook came with the highest offer? I cannot come with any other reasonable explanation.

I have to say, this part of Zuckerberg's announcement really excited me;

But this is just the start. After games, we're going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles in your home.

The idea of being that close to a Wimbledon match for example is just crazy, but the tech does have applications well beyond gaming. Facebook as one of the big technology companies of today has the scale to take this to new heights.

This just does not make any sense. There were so many better choices for Occulus to be acquired by. Did they decide it is time to cash in and Facebook came with the highest offer? I cannot come with any other reasonable explanation.

On the surface, I can completely understand. But when you think about it, there are applications for this technology that Zuckerberg clearly doesn't want his competitors to get hold of. If this was Microsoft or Google, it would suddenly make sense but Facebook are also competing with them for dominance in a number of areas already.

"At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform"

I'm on a dev team who've made an Oculus game that's been well received. I'm excited to see what the collaboration brings! I'm sure it'd be easier to focus during online classes if you took part using a Rift.

I'm one of the only ones who had zero interest in Oculus in the first place. Now my interest is even less. Although it does make you wonder what kind of things you would buy in life if you had enough money to spend 2 billion dollars on a commercially unproven project and yet it still didn't put a dent in your bank account. With that kind of money they could make the Dreamcast 2.

Early April fools joke, please? Whether we like it or not, you have to hand it to Mark Zuckerberg. In a single pen stroke (or many) he single handedly helped legitimize VR to an entire world. I know we are all upset, because OC RIFT was our baby, our little under dog pet. This is a potentially world changing partnership that plays EXACTLY into the kind of vision that Lucky Palmer has been championing from the beginning. Most companies before were content to watch from a distance, perhaps with a slightly bemused grin as the little OC that could was taking it's first steps. You can be sure that bemused grin is gone, and they have a very serious look now.

Whats the line from Django? "You had my curiosity gentleman, but now you have my attention."

Heh. VR goes "viral" indeed. Conjunctivitis alert. Woop, woop. Yeesh. That AND facebook data mining in your VR experience? NO thanks. Hell, other than trying one of those new dev units out to see what the deal is in a game experience, there's NO way I'll even go near a Rift now. I use facebook, but despise it wholly and more each update.

I guess the "only" wonderful thing here is I'd bet the price of the commercial Rift will be affordable to the point where it's a no-brainer that a ton of people buy it because it's in their range. It'll most likely get a HUGE retail presence, the commercials will be non-stop and relentlessly push VR as "life changing" and so forth and so on.

Win -win for the company side... Win and watch your data go all over the place faster on the consumer side... Oof.

Completely agree with you. Getting all those FB stocks doesn't seem a good investment. And, I don't know exactly why, I feel like IOI just acquired the OASIS in "Ready Player One" before the OASIS could even start....

I read an article here the other day about Sony's VR, and the article referred to OR dominating the home VR space. I thought then, how can an unreleased product line be dominating a market? What it has at the moment (or arguable had until this broke) is a big buzz around tech and game enthusiasts. However, Sony could get a lot more visibility utilising PlayStation, and prominent positions at E3 and the like.

Add to that, although OR seemed to have momentum, the consumer unit actually is not guaranteed to hit shelves before Morpheus. Standing alone and releasing after Morpheus would see Sony potentially mop up, especially as Oculus has not reached mainstream consciousness yet. At the moment it is a lot of potential, if it gets buried by Sony's offering it's a footnote, in a year's time, after more investment it may have been worth less. So if the intention was to cash in, now probably was the time.

Facebook isn't the most obvious fit, but not many other companies are throwing the same money around.

We'd like to believe it wasn't all about the cash, sure, but it took a lot of investment from people who want a return.

There's no way Morpheus releases before OR now. Sony's fighting for capital while FB is filthy rich. I'd wager that one of the major reasons that OR was lagging on release was a price tag that the OR team knew would not be easy to swallow. Now, FB will release that thing for ten bucks if it means mass appeal.

@Adam Campbell
You hit the nail on the head with the MS/Google mention. Google has Glass, and MS has Fortaleza (which was described as more of a Glass device instead of an OR device). We all know corporate espionage exists, so I'm sure that FB knows a few things about these unreleased (and unannounced) devices. So they want to get in on the action. It's a brilliant business move; FB doesn't have a good track record with hardware (their phone was not well received) so they bought previously "established" hardware instead.

I really think is a huge step for VR gaming, and definitely has the potential to be the next big thing in the field of wearable technology - not just VR gaming, but a VR life. Like Mark Zuckerberg has commented - "Imagine enjoying a court side seat at a game" - I think this acquisition brings us one step closer to being in two places at once, because with Oculus's intellectual/technological horsepower and FB's money/reach/vision, the possibilities are truly great.

I would guess the next step FB would be looking at would be to shrink down the size of the Oculus Rift with major technology and design optimizations, so that the mass market can purchase these, carry it almost everywhere and not find it embarrassing to wear or use. Competition to Google Glass? Maybe. Imagine having an RPG style game being set in a real world scenario - just wear your Oculus Rift, and you find players to interact with as you roam around the world!

I don't think anyone is thinking this through about what is possible with 2 lcd screens mounted on your head. That doesn't seem like it would make it easier to get a real time / lag free / 3d camera(s) for everyone at the court of a basketball game. I mean what is he on about really?

"Zuckerberg clearly doesn't want his competitors to get hold of"
Considering Sony (and a number of other startups) are building a headset, I don't see how buying the not really mainstream oculus name gives them an advantage. I honestly don't know what this purchase is about, unless he got the wrong idea and thinks you can be transported to basketball games or actually visibly see your doctor when wearing the headset. Now that would be amazing.

Well i have Zero interest in VR, but if I was to try it out it would be SONY VR headset for me. Why in the world would facebook spend 2 billion dollars on a product that hasnt been proven commercially.

I am a OR developer and have a dev kit on my desk now. The thought of lots of FB ads generating revenue in VR is not very appealing to me. If they drive the market that way then I will drop all of the dev kits into the trash can. This news is not exciting at all, and I fear the worse from FB.

From a community stand-point, the OVR community had been a temple of strength, and offered support and innovation during the time that I had been involved. This news has shaken them to the core. I am concerned factions will fracture from this development, and though Sony may eventually reap the benefits, the VR community will see this a s a black mark in the progression towards true VR entertainment.

At first I was like: I thought Oculus was made in a "garage". Well Apple was made in a garage and then Microsoft "stole" their windows system. Makes sense haha. It's a lot about momentum/trend.

Uhm.. No, MS didn't "Steal" Apple's Windows system..

Anyway, I really don't understand what all the fuzz is about.. People bitch at facebook, but meanwhile they keep using GMail and other google related services which are much worse when it comes to datamining your personal data..

I must say, it came to me as a big suprise, didn't see that one coming..
But at the moment I still think the Oculus Rift is the better VR-vizor, having seen what Sony's morpheus is about, I don't think they solved some problems the OR already solved (and let's not forget, Sony has been making video vizors for decades now).
And OR is a hardware platform mainly, the only 'problems' might arise if you are going to use services that are connected with facebook, but why would you use those services.. A game doesn't need those services, or your own projects won't need them either..

Considering Sony (and a number of other startups) are building a headset, I don't see how buying the not really mainstream oculus name gives them an advantage.

Possibly the best implementation so far, considerable patent portfolio, incredible problem solvers like John Carmack ;)

I think there are plenty of things Facebook can get out of Oculus and they have also prevented an acquisition by any of the competitors I mentioned. Many companies and startups working on 'a headset' =/= Oculus Rift.

No VR product is mainstream, so I don't see how that part of the statement is relevent. Many are betting on VR being huge in the future.

Never has my enthusiasm for a product plummeted so far so quickly. I firmly believe Oculus has secured their place as the 'mainstream' VR offering - they'll be the interface of choice for the social and casual market (in about 5 years) - but that's not what I was personally hoping for from them. I really hope another company steps up to fulfill the enthusiast sector with a superior product at a higher price point for the 'hardcore' VR fans. There are plenty of companies out there with the capability of doing it, I just hope Facebook don't patent the hell out of the technology.

Oh. It's funny how something like this can absolutely ruin your impression of something. For me, as many have said, the Rift somehow feels tainted. I'm sure it wont affect what work is being done, and in fact the extra cash can only improve matters, but as with many this completely changes my view of the company. I even had to double check it wasn't April 1st.

Andreas: I'm not saying there's anything wrong with VR being mainstream, in fact I think that's a good thing. It's just that I don't trust Facebook to maintain the focus on core games and immersive experiences when they're known for advertising and 'social' integration, not to mention the risks of data mining that have already been mentioned. I'm just saying from a personal perspective, I'm hoping for more high-end gear and it doesn't seem like this is going to come from Oculus any more.

And yes, I agree that this is good for VR in the long term, I just wish FB had acquired some other company :)

Edit: I still think the CV1 will be excellent, perhaps better than it would have been, but I hope that by the time the CV2 comes out, there'll be better alternatives.

Well this is a little strange to say the least, but some peoples reactions are even more bizarre..

I get that people wanted to back the Oculus Rift when it was just an idea wanting some crowdfunding, but now the project has acquired 2billion.... let me say that again 2BILLION!! Some people are like 'that's it, now Facebook are involved I am out' which kind of implies they liked the idea but not the product itself, which is strange.

I would have thought that if people really wanted to use the Oculus Rift and have all the groovy VR experiences, then surely they would be happy that a large chunk of capital will now make sure that the Rift succeeds.

So Samuel and Mark, what you are saying is you want a piece of kit only for yourself, or that only few can afford? Why is that?

What is the problem with a much wider audience having access to what amounts to be an amazing experience?

i want a device from gamers for gamers. thats what they pitched on kickstarter. now its not about core games anymore. if you dont know what facebook means for games, take a look into zynga games. this crap are not even games. its not about games anymore, but about - like they are allready keep saying - the "social experience". i don't want a social experience. i want to dive into great high quallity core games and get lost in them.

facebook will also dictate the rules for the OR plattform now. forced facebook account, forced social interaction features, datamining and privacy violations, a closed and strongly regulated plattform and so on. maybe you haven't designed for facebook yet, but i have. its a pain in the ass and everyone in the company where i worked before was very happy when the annoucnement came in that we will drop all future plans of releaseing anything for facebook.

this just kills the whole vision of the thing. if sony is clever, then they will pick this up very fast and announce PC support for their device.

i wasn't talking about the current facebook games, but about the way how they are designed and what this means for games on the facebook OR plattform.

and about the rest...well, let me just quote you:

It is not facebook's fault that Zynga style games have become the norm and so popular.

It is not just about what you want I am afraid.

but hey, if you have no problem with it, than its ok. i know, the money and so on. the article here tells the story. but for me (and judging from all the negative comments here about the sellout the majority of the gamers and developers too) games are much more than just milking millions non-gamers with cheezy apps, data mining for privat information, crossmarketing per social features and all this shit...

To me a larger instalment base of the platform means that there is far more chance of niche and special games and experiences. The wider the audience, the more chances for independent developers to create outstanding content, because they are not reliant on everyone owning the platform to buy their product.

i guess you are the only one with this. a larger audience like this will lead to a market where small studios are drowning, innovation gets killed by risk aversive strategies, the development costs to stay competitive will increase a lot and the games will become more and more games for the broadest mass market (which means in this case games for people who don't like to play real games).

take a look on facebook and maybe you can understand what i am talking about. the left companies there are copying the same 3-4 concepts over and over again. everything else has vanished and the plattform is dead for games. how many per cent the social gaming market dropped last year again? -25%?

the mobile market is also a good example for this. visibility becomes harder and harder. the marketing costs are rising into the sky, the concepts are becomming less and less innovative and the staggnation and copy phase already has begun.

if you think the sellout to facebook has anything good in storage except for the bussines guys, then you don't have the slightest clue about games or this industry in general.

Well, I was so disappointed by the news that I even went ahead to get the account verified here to be able to post this comment.

I don't understand how VR and social networks can function together at all.
These are 2 completely different audiences! VR is for "freaks" (like me and other devs here), that is not-so-social males btw 15 and 40, tech geeks - that is the hardcore gaming audience. VR was supposed to deliver Shooters, RPGs, Space Simulators and such - all for the hardcore gamers. Now, Facebook is casual, its primary audience is females, anywhere between 25 and 40. What they mostly share on Facebook is photos of their kids/babies and cats. I don't see any intersection here. Will they make Farmville in VR? This sounds like nonsense to me because the whole monetization of casual games has nothing to do with VR. VR is when you delve into a fictional world for a long time, it's an escape from real world (like World of Warcraft) - while Facebook and all the casual stuff is all about playing for 1-2 mins while on a bus stop or at work while the boss is not looking.
On the other hand, if any hardcore games come out for these VR glasses, they won't benefit from any social network integration but rather will turn off players. To me, as a hardcore gamer, a hardcore game with and F button inside is disgusting! The phrase "share your achievements with friends" revolts me. My hatred towards Facebook and all this casual crap is almost religious. I'll most likely never buy any game, ever, or even play for free, if this game has any F2P inside, and F2P is what Facebook is about. Or is it about ads? Well, seeing ads inside a virtual world is something I certainly won't buy.

Anyway, I'm now happy that I didn't purchase DevKit 1. And with surely NOT purchase DevKit 2. And I certainly won't have any interest in Oculus VR.
So sad.

I have an impression that the old-school hardcore gaming audience is not relevant any more. And I feel old and unneeded because of this. It's the same thing they did with World of Warcraft and pandas.
It's more than just a sale to Facebook. It's death of a generation. This news say to us: "You aren't relevant anymore". That's why everyone (me included) are so negative.

When the Rift started,mit helped galvanize the creative juices of indies and creatives as a new viable tech, free from the evil clutches of economics and corporatization, hence the immense groundswell of support. However this unholy marriage, destroyed the projected expectations and future dreams. Snuffed it out. Killed it prior to birth.
Far better to have been free, independent and untainted

Anyone foolish enough to say it will be games or biz as usual will be living In a unicorn berg verse :)

Just in short, Facebook fills mostly needs of women, or maybe of social men. Facebook is about sharing photos, jokes and funny videos. Or well, maybe, for finding dates. Casual / social games are small simple time killers for (mostly) women.
Hardcore games (for which VR makes sense) fill mostly needs of men, and a rather small percentage of women. Hardcore games are complex experiences, they give an alternative reality for people who need this. In such games what you need is get away from real world, from friends, your job, your babies, cats, jokes etc. Hardcore games are an adventure, they are a vacation.
Facebook is motion towards people. VR is a motion away from people. I can't see how this really can work together. It's just that the people themselves (who play hardcore games and those who use Facebook) are so much different that they won't enjoy being together in the same games. That's why I think that neither Facebook can bring anything positive to VR, nor VR can bring anything positive to Facebook.
This whole event looks like a crazy mistake on Zuckerberg's side and an act of greed on the Oculus' side.
I hope I am mistaken and they really know what they are doing, but in any case I'll wait and see if anything good come out of this before I even start considering developing for this platform.

Oh and btw, what about sex games in Oculus VR everyone has been talking so much about? Facebook is for 13+, not 18+, so what?.. will such games be forbidden just like on AppStore? Another market just cut down before it could even appear.

The other thing is that 2 billion is just too much money to sell your company for. Now facebook is 2 bil in the hole for this device and they need to make a profit. They won't get that back by sales of the device alone for sure.

Keeping their budget smaller they could have been in a situation where all is profit and they could afford to work with the customer for the best product. Now it is going to be an uphill climb to get that money back and how are they going to fill that void?

VR will become the new motion control, as the majority of experiences will be aimed at an audience more interested in the novelty of a virtual experience than in playing a video game. The regular gaming crowd will get thrown a few bones for their VR purchases but will ultimately decide they'd still rather play from the comfort of their couch in front of a nice television.

@andreas how can i be hopeful and positive if i know from experience how this works? OR was about the core gaming experience. thats the opposit of what facebook stands for. if you don't understand the difference in these targetgroups and the problems which arise on this kind of broad mass market, then don't try to compensate that lack of knowledge with speeches about "hope" and "positiv thinking", please.

@Shawn
It's actually $400M with $1.6B in FB stock. It's not quite the same thing as paying out $2B cash.

@Samuel
You're making a very cardinal mistake; thinking that the people funding a project need to be involved in it. That's just not the case, in most industries. You need someone to balance the books; someone who can (objectively) assess risk, not a foaming fanboy who will throw millions at a pet project. And to claim that OR sold out over this, when they'd already been given over 70 million dollars by rich firms that want nothing but profit from OR. It's a really common process.

Your claim that FB makes games alone is ill-informed. That's like blaming the console manufacturer for 3rd party shovelware.

Its not worth hating it because you hate their website and it doesnt mean its going to be the same. We are seeing that particular strain of social media fall apart, which is why they are looking elsewhere for more fundamental business opportunities.

There is nothing to suggest that investors from elsewhere would bring anything better and VR now has a great opportunity to move beyond niche.

Lets face it facebook could have opted to buy King, but they have taken the rather excelllent decision to put their money here instead.

In a nutshell, can Facebook help make Oculus a viable de facto VR platform that gamers will want to game or take fantastical flights of VR fantasy that content developers will create excellent content on, whereby Facebook can successfully monetize like steam or the apple App Store

@Nick try to be realistic. FB payed 2,3 bil dollar for it and mark already stated that he wants to integrate OR into his own vision of a VR platform. they will not only be involved, but dictating the strategy and everything for it.

@Sandy I for one love facebook as a website and would miss it hugely if it didn't exist. I do however feel it is a very bad move on Oculus' part to be bought by facebook. Just a gut feeling. Not necessarily based on anything in particular. But equally so not coming from a place of bias against facebook itself either.

its always the same. a big corp takes over a small creative start-up, the Corp PR dept spins "that nothing will change at the start up", but its never the truth. The change creeps in slow and steady until nothing remains of what once made the start up special.

I just don't get all the negative lashing out and such about this. I don't particularly care for FB, but them putting money behind something like OR seems a win for the OR group. Who cares what FB plans to use it for for their own platforms, that's their business. I don't see how this affects developers, core or otherwise, at all. Surely FB won't somehow be dictating the types of games developed for OR...? And if not, then whats to stop those who want to make core experiences from doing so? It would seem to me that OR being able to get out to a much larger audience, and being able to bring in more Dev talent to work on it, is nothing but good for the core AAA developers as well as the small studios who may not have even been able to attempt to develop for OR prior to this investment by FB.

Now, of course, if you tell me that FB has purchased this and it will be a FB only device, with no chance of being used separate from FB...then by all means, raise lots of hell. Otherwise, I think I'll follow Andreas and Adam in the "wait and see" area...=)

Heh. I kind of wonder what the reaction would be if fb decided to buy up Star Citizen for ten times its current funding (adjusted to another billion or so with stock) and have it completed as an exclusive game to their network with Rift support. Cue assorted backers cheering or screaming for assorted reasons, I'd bet...

a larger audience like this will lead to a market where small studios are drowning, innovation gets killed by risk aversive strategies, the development costs to stay competitive will increase a lot

A lot of small studios would fail to exist if they didn't have a large market to tap into.

I also don't think innovation would be as high if small studios couldn't go out there and make innovative, independent games for the huge audiences we see on PC and mobile as examples. So I don't get what you're saying Samuel.

Asides from studios, a larger market and more finance should make it easier to bring down the costs of hardware for the consumer. I don't see how being a niche is supposed to beneficial here.

This deal, like it or not, makes it likelier that Oculus can remove one of the biggest worries the industry has, cost and ubiquity.

My only complaint about this is just that the kickstarter backers who made this possible have essentially set up a business for free to a prospective buyer and without having a share in the company. Those Facebook shares should really be shared amongst the backers of the kickstarter campaign. Outside of that, I think it needs investment to scale up.

The thing with facebook and why I hate that it purchased occulus Rift is simple. Facebook takes something and puts out so much of it that it renders it into obscurity. When you have too much of something, their is more mediocrity than their is quality. Just as with social apps and mobile games. Thats why i turn to console games and steam for quality expiriences. They offer a more exclusive enviroment for quality content. Its like the mile high club for video games. The raging rivalry between SONY and Microsoft is what keeps these games alive. They set the bar with games like Last of Us, tomb raider, second sun and Halo.

The magic Occulus rift had when it was independent is lost through facebooks aquisition. And this is coming from a guy who isnt really interested in VR, but i did admire the drive and passion these guys have. Right now they sold that to facebook.

That article is not the only opinion in the games industry, or the focus of all experience in casual and independent games development. A flaw in business models appears to be more to blame than the size of the market.

I simply do not agree with you that Oculus being part of a bigger market is somehow worse for developers and consumers just as I think it is untrue that a small market is somehow better for a huge number of developers. You actually need people to buy those games or buy into them.

A small number of people can't provide an infinite spending power, time or storage space on their shelf or device. There are many people who will disagree with you, even if you or others might disagree with me.

As time settles a few things, I think any game developers interested in VR should be thrilled with the new possibilities of this deal - with some other companies. If SONY, for example, can use their design ideas to help set VR standards and the direction of this field, as they did with Blu-ray, then SONY could turn this rift that you have between FB and yourselves into something good and stronger. As game developers, you can support standards and manufactures you like or respect, but you will have to pick if it comes to a showdown between FB vs SONY (or anyone else out there).

Do you really know what you want or need yet, or are you just going to cry in your soup and wait for others to decide things for you?

I always imagined Occulus Rift to be something closer to Ouya. A niche product for a niche audience, something that was cool rather than something that was going to make a lot of money and that's the reason it needed a Kickstarter and received so much backing.

Off course things changed and it became obvious it was going to be big but ultimately with Facebook's history for regulation and privacy it makes it un-usable for that original niche audience, both developers and users. Backers do have a reason to be pretty annoyed at this.

@Adam Campbell

If you don't have the huge finances to run a user acquisition program then it doesn't matter how many potential customers there are. No one knows you exist. Smaller markets allow you to get noticed. It's really that simple and it's not even worthy of debate because it's so obvious both in logic and experience.

Why though? When you back a project on Kickstarter you aren't buying shares in the company. You are backing a project and get a 'perk' as a reward for doing so. You aren't entitled to a share of the profits, you aren't entitled to dictate what that company does.

@Richard. I get your point entirely, but rightly or wrongly its going to lose the community feel of coming from the ground up if venture capitalists are just going to run off and monetise it. Lets face it, there is going to be a healthy slice of the developers hard work goes into their pockets and they arent buying it just because its fun. I had this down as something that would remain relatively open for everyone to go and create something amazing and in turn be able to make a living from it. I'm not so sure that will be the focus going forward, but I could be wrong.

The problem Richard is that the product Facebook will release probably won't be fit for purpose as it will probably violate privacy rights and be regulated to stop certain apps/games from being released.

This isn't the product that was advertised in the Kickstarter so essentially he has taken the money and done something different with it.

@John Owens: the problem FB will have is the same forces driving uptake of mobile+tablets vs console for gaming. The goals FB have for VR won't actually need fully capable VR, even if FB choose not to compromise the experience ordinary folk will decide the experience isn't compelling enough to use regularly for the effort involved. They'll settle for 50% of the fun with 1% of the effort, on something they already own like a phone.

Less intrusive devices like Glass are more likely to gain wide success, they give enough of the experience for fun but with almost none of the effort.

Reading some of the comments I get the feeling of having missed the part of the announcement which explains the Oculus Rift now being an alien probe straight out of South Park instead of a screen nailed to your forehead.

That device that you talk about being made is only a prototype. It hasn't actually been released yet and now will essentially be discontinued. If you where a developer or user expecting a finished product (without facebook) you have a right to be annoyed.

@Klaus Preisinger - I think you're being naïve what playing a game can tell people about you. It's the closest think to having an alien probe put into your brain. e.g. It could tell someone your intelligence, whether your impulsive, quick to anger, calm under pressure etc

At the moment it's not clear how it will be used if at all by Facebook. Facebook might just take a completely hands off approach to the SDK and simply be another developer for it when building what they plan. Which is probably what they will do initially however once people are hooked expect that to change.

It's such a shame as well because they could have been the perfect fit if Mark would address the privacy issue.